Port Sells Bonds to Purchase Bremerton Waterfront Property

BREMERTON - Port of Bremerton commissioners unanimously agreed Tuesday to borrow $4.425 million and use most of it to pay for a piece of downtown waterfront they believe is essential to putting more boats in the Bremerton Marina.

They also believe the purchase will make the port a major player in future downtown development.

"When opportunity knocks, if you don't take advantage of it, sometimes you sit back and watch the world go by," said Commissioner Bill Mahan.

Even conservative Commissioner Larry Stokes supported the purchase.

"The facts are, it's over two acres next to the marina, right downtown," he said.

The borrowing will be in the form of general obligation bonds to be paid back over the next 20 years. About $330,000 in annual debt service will be paid on the bonds, which are rated by Moody's Investors Service as Aa2, considered high quality.

The overall interest rate is 4.21 percent. The lion's share of the bonds were sold Tuesday morning, a good number to banks across the nation. The remainder, about $200,000, was picked up by the port's underwriter.

The new bonding will allow the port to complete a $3.5 million purchase of the downtown Bremerton waterfront property. The purchase agreement with the seller, the troubled Kitsap County Consolidated Housing Authority, is expected to be completed by the middle of next week.

An independent appraisal company hired by the port concluded that in May the property had a market value of $5 million.

Not part of the sales agreement is a $392,000 federal grant that will allow almost immediate public improvements to the property, located along Washington Avenue between KCCHA's Harborside condominiums and Second Avenue.

The grant money will be used to install public access to the waterfront off the end of Burwell Street — across the part of the property that's nearest to the condos — to the water.

The stairway to the shoreline will be flanked with trees and boulders. It will be topped on Washington Avenue with a viewing and seating area, and there will be two stairway landings below. The project will also have a lawn below the parking area, according to Gary Sexton, the city of Bremerton economic develop director acting as project manager for the grant.

The access should be ready for the public by late fall or early winter. The grant was given to KCCHA, and there was talk about trying to transfer it to the port. But as of Tuesday, it appeared the grant would stay with KCCHA, and that all sides have agreed it will be used for the public purpose.

City of Bremerton workers already were on the property Tuesday, relocating a sewer line to under the future pedestrian-access portion at an additional cost of about $60,000 to the port, according to Sexton.

Port leaders have said it would be cheaper to move it now on the undeveloped property than in the future, when the port might decide to more intensely develop the property with buildings.

But right now, the purchase is all about providing parking for the marina, now only 31 percent full.

Boaters have complained loud and hard that there's no parking available, hampering their plans to come to Bremerton. A private parking lot with about 116 parking spaces is there now. The port will dedicate 33 waterside spaces it inherits in the sale for marina parking and charge the public to park in the rest, providing some income to the port.

Ultimately, the purchase is about making the new marina less dependent on port taxpayers for its operation and more self-sufficient, Mahan said.

"That's what's really at stake for the port," he said.

How the remaining rough million of bond money is spent remains up in the air, but Mahan and port CEO Cary Bozeman said it could be used to pay for the port's portion of a new road connecting its industrial park with 75 acres of empty and waiting industrial space to the north. The 1,150-foot-long road would cost $1.8 million in total, and port officials hope to reapply for a grant to help pay for it.

The new bonding for the Washington Avenue property doesn't significantly change the port's indebtedness level. At the end of 2009, the port will make final payment on a $3 million bond issue initiated in 1999. The remaining balance on bonds taken out by the port in 2006 to building the Bremerton Marina is $14.5 million, according to Becky Swanson, the port's financial officer.

As part of the port's purchase of the Washington Avenue property, the port has also agreed to take over an office-space lease for the KCCHA in the Norm Dicks Government Center.

Not everyone watching Tuesday night's meeting was pleased at how the port informed the public about the bond sale.

Resident John Hanson said the port should have distributed a news release about the bond sale a lot earlier than late Monday.

"Very few people in your constituency got a chance to weigh in on the issue," he said.

Bozeman countered by reading a timeline of all the times the bonding was discussed.

"I don't know if it was a perfect process, but we made every effort we could to inform the public," Bozeman said.